Will We Exceed the Spending Cap?

September 29, 2011

According to this article in the CT Mirror, the Malloy administration is already warning—less than three months into the fiscal year—that it may not be able to stay within the constitutional spending cap. The Office of Policy and Management (OPM) has formally projected $17 million in cost overruns for the budget that just took effect on July 1.

Three things are cited in the article as posing potential difficulties to the spending cap:

Medicaid costs

Challenges tied to the union concession plan

Legislative support for a winter heating assistance program

OPM Secretary Benjamin Barnes has indicated that this is not something that needs resolution now, just careful monitoring.

We asked Connecticut Health Foundation consultant and budget expert Alison Johnson (who has also guest blogged for us here and here) to comment on this development:

“The current situation demonstrates how inevitable challenges are with the spending cap. This will not be the last year that the state bumps up against the cap. When 1/200th of 1 percent of annual spending brings us close to violating the terms of the cap, perhaps we should take a look at it and think about potential reforms to make it better reflective of Connecticut’s ability to support state services.”

The fiscal health of the state of Connecticut is always on our radar screen since health care is a large part of the state’s budget. We’ll keep you apprised of what happens.